Primark reports small drop in Christmas sales but healthy fundamentals
Parent company Associated British Foods reports healthy growth
UK sales at the mass-market and mass-produced retailer Primark dipped slightly across the festive period compared with the year before, with parent company Associated British Foods (ABF) recognising a “marginal decline” in like-for-like sales.
Notwithstanding this small drop over Christmas, total Primark sales in the first quarter of 2019-20 were up 3 per cent on the year before; 4.5 per cent if one does not include currency fluctuations.
Indeed, sales did not drop as dramatically as some competitors, and the retailer actually increased its share of the British clothing market.
With seemingly consistent fundamentals Primark looks set to continue to buck the trend of the "dying British high street". Further afield, Primark continues to experience healthy like-for-like growth in the United States and Europe.
AB Foods’ overall sales increased 4 per cent in Q1 with AB Agriculture and AB Sugar spearheading this growth.
AB Agriculture enjoyed a 10 per cent year-on-year revenue increase with its ingredients unit posting a 1 per cent sales rise, or 3 per cent at constant currency rates. An increase in the European Union’s sugar prices helped AB Sugar’s revenue rise 5 per cent year-on-year, or 7 per cent at constant currency.
Commenting on its guidance for the year ahead, AB Foods stated: "Our outlook for the group is unchanged, with progress expected, on both a reported and an IFRS 16 adjusted basis, in adjusted earnings per share for the year."
An International Financial Reporting Standard (IFRS) is a standard providing guidance on the accounting for leases.
The company's share price has gained 2.70 per cent, to stand at 2,624.00 GBX by lunchtime trading